A fresh report compiled by a faction of Senate Democrats asserts that Tether, the U.S. dollar-pegged stablecoin, functions as a primary instrument utilized by the Iranian administration to evade economic restrictions.
Democratic members serving on the Permanent Subcommittee on Intelligence under the Senate’s Homeland Security and Governmental Affairs Committee released a document on Monday arguing that Tether (USDT) is instrumental in enabling Tehran to execute financial transfers that circumvent global embargoes.
The publication stated that Iran’s cryptocurrency-powered shadow financial apparatus has handled substantial monetary volumes and involves numerous Iranian entities, while pointing out that Tether has repeatedly omitted blocking addresses linked to Iran.
The study characterized USDT as a vital monetary lifeline embedded within the shadow banking ecosystem of Iran.
The document alleged that when Tether does proceed to freeze addresses, the process occasionally spans weeks, and at times the corporation replies to inquiries without actually blacklisting the wallets.
According to the text, prior to 2024, Tether failed to comprehensively and consistently freeze addresses flagged by counter-terrorism authorities, and the firm still falls short in proactively restricting overtly malicious addresses. The investigation noted that this lack of deterrence invited exploitation, causing extremist factions like Hamas to pivot away from transacting in Bitcoin and varied digital assets to championing USDT instead.
Although the publication omitted an aggregate figure for the total USDT volume allegedly handled by the Iranian government, it estimated that the state executed roughly $2 billion in transactions over the preceding year.
The Wall Street Journal initially broke the story regarding the paperwork.
The findings framed Iran’s utilization of USDT as a broader indictment against the digital asset sector overall, stating that cryptocurrencies actively undermine efforts by the United States and partner nations aimed at blocking regional terrorism driven by the Islamic Republic.
Within an online post published Monday, Tether countered that it had aided nearly $550 million worth of Iran-associated freezes, enumerating multiple recent measures executed pursuant to American regulatory directives.
Tether Chief Executive Officer Paolo Ardoino stated in the publication that as governments amplify initiatives to obstruct sanctions circumvention and the funding of terrorism, the company maintains continuous and direct communication with official bodies across the United States and globally to guarantee that unlawful capital can be identified and frozen.
Originally published at https://www.coindesk.com/policy/2026/09/28/tether-is-a-lifeline-for-iranian-regime-senate-dems-say-in-new-report.
